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Part 2 – USDA Income Guidelines: 2024 USDA Debt to Income Ratios are Increasing!

June 28th, 2024 by Sean Stephens

USDA Income Guidelines: 2024 USDA Debt to Income Ratios are Increasing throughout Florida, Texas, Tennessee, and Alabama!USDA Income Guidelines: 2024 USDA Debt to Income Ratios are Increasing throughout Florida, Texas, Tennessee, and Alabama!

I have breaking news to report regarding increased qualifying ability under the USDA Program! USDA’s recent announcement will have the immediate impact of increasing both the sales price range and maximum USDA Loan amount that our rural homebuyers can qualify for.

As the housing market continues to change, qualifying budgets are what homebuyers are laser focused on along with a wider range of USDA eligible property types to search for.  In today’s short video, I will explain USDA Debt to Income Ratios and provide examples of how we will receive increased qualifying flexibility.

And if you have not yet done so, remember to download our newest USDA Blueprint for Success with the link below.  This free guide is designed to walk you through the USDA process step-by-step and is a great educational resource for the real estate community.

USDA Income Guidelines: 2024 USDA Debt to Income Ratios are Increasing!

USDA debt-to-income ratios (debt ratios) are calculated in two ways, the housing ratio and your total debt ratios.

The housing portion of your debt ratios includes monthly amounts for items such as your principal and interest, taxes, insurance, and other costs such as association fees (this is commonly referred to as your PITI payment).  We will take the PITI payment and then divide that by your total monthly gross income used for qualifying (repayment income).USDA Income Guidelines: 2024 USDA Debt to Income Ratios are Increasing throughout Florida, Texas, Tennessee, and Alabama!

Additionally, your total debt ratio consists of that housing expense plus other monthly debt such as any auto loans, credit cards, and student loan payments, which is then also divided by the monthly gross income.

Although some exceptions do exist, USDA published guidelines currently permit 29% of your monthly income to be allowed for a total housing expense.

For example, if there is $6,500 in monthly gross income, 29% of that is $1,885 which would be the number that your monthly principal and interest, taxes, insurance, and any association fees would have to equal.

Ex. $6,500 X 29% = $1,885.00

However, USDA just announced on June 25, 2024 that USDA Debt to Income Ratios are increasing from 29% all the way up to 34% of your gross monthly income! This is big news for your USDA qualifying loan amount and overall eligibility for a wider variety of homes and sales prices! This increase is expected to be implemented on August 5, 2024.Sebring Florida USDA Loans. Okeechobee FL USDA Loans. Tampa FL USDA loans.

Using the above example, this would automatically be able to increase your monthly payment to $2,210!

Ex. $6,500 X 34% = $2,210.00

While this was only a brief summary of USDA Debt to Income Ratios, remember that this new guideline update will greatly increase your qualifying budget and allow for more flexibility in the properties you look at.

As a USDA Approved Lender, we will walk you through the USDA loan qualifying process step-by-step. Just call, text, or email to discuss your scenario and let us show you the “Metroplex” difference!

Toll Free: 800-806-9836 x280
Call/Text: 863-593-2001
SeanS@MPLX.org

Thank you again for forwarding and sharing today’s video with any friends, family, co-workers, or clients who are looking to buy, sell, or refinance!

As always, I want everyone to make it a great day, and look forward to seeing you right here for the next tip of the week!

P.S. – You can download our “USDA Blueprint for Success” by CLICKING HERE.

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